Budget 2024 Highlights

Minister for Finance, Michael McGrath delivered the final Budget today, 10 October 2023. Below we outline the highlights of Budget 2024.

Personal Tax

Income tax standard rate bands increase by €2,000 to €42,000 (single person), with the married single earner band increasing to €51,000.
Personal, PAYE, Earned Tax credits to increase by €100 to €1,875.
Home Carer Tax Credit will increase by €100 to €1,800.
Incapacitated Child Tax Credit to increase to €3,500.
Small change to the second rate-band of Universal Social Charge which will increase from €22,920 to €25,760. The 4.5% rate is reducing to 4% from 1 January 2024.
Increase in the exemption from Income Tax, USC and PRSI to €400 on profits arising from domestic microgeneration of electricity which is supplied to the grid.

Enterprise/SMEs/Agri-sector

Introduction of 15% Corporation Tax rate, under the OECD Pillar Two agreement, on trading profits of large companies. SME sector unaffected. Further details to be announced in the Finance Bill.
Capital Gains Tax relief for Angel Investment in innovative start-ups. Qualifying investments will be certified by Enterprise Ireland with a minimum investment in new shares of at least €10,000. Relief will apply if shares are held for at least 3 years. A reduced rate of Capital Gains Tax of 16% will apply on a gain of up to twice the initial investment. A lifetime limit of €3m will apply to the relief.
From 1 January 2025 the upper levels of Retirement Relief will apply on disposals to children and to others between the ages of 55 and 70. A €10m limit will be introduced for disposals to a child up to the age of 70.
With effect from 1 January 2024 the minimum holding period of investment to claim relief under the Employment Investment Incentive (EII) scheme is being standardised at 4 years with the limit on such investments being increased to €500,000. Further changes to EII will be set out in the Finance Bill.
The rate of the Research & Development Tax Credit is being increased to 30% in respect of 2024 expenditure. The first-year payment threshold, which allows for a claim to be repaid in full rather than spread over 3 years, is being increased to €50,000.
Section 481 Film Relief investment cap being increased to €125m.
Accelerated capital allowances for energy efficient equipment are to be extended for a further two years to the end of 2025.
Accelerated capital allowances for farm safety equipment are to be extended to 31 December 2026.
Stamp Duty Consanguinity relief which reduces the duty applicable on transfer of farmland between family members from 7.5% to 1% is being extended to 31 December 2028.
The threshold for Stock Relief for registered farm partnerships is increasing to €20,000, while the aggregate lifetime limit of stamp duty relief for young trained farmers is being increased to €100,000 from 1 January 2024.

Housing/Cost of Living Measures

The Rent Tax Credit is being increased to €750. The tax credit will also be extended to parents paying their children’s rental costs while in third level education in the case of Rent-a-Room accommodation or “digs”.
A new Rented Residential Relief is being introduced for Landlords. The relief will be granted at the standard rate of tax and will be as follows; €3,000 in 2024; €4,000 in 2025; and €5,000 in 2026 and 2027. The tenancy must be registered to the PRTB, or the property let to a Local Authority. The value of the relief will be €600 to €1,000. The relief will be clawed back if the property does not remain in the rental market for the 4 years.
The Help to Buy (HTB) scheme is being extended to the end of 2025. Amendments are being made to the scheme to enable contributions through the Local Authority Affordable Purchase scheme to be considered when calculating the 70% loan-to-value requirement.
A temporary one-year Mortgage Interest Tax relief of up to €1,250 is being introduced for homeowners on variable or tracker mortgages with outstanding mortgage of between €80,000 and €500,000 on the 31 December 2022 and fully LPT compliant. Relief will be at the standard rate on the interest rate increases between 2022 and 2023. The relief will be claimed on filing a tax return for 2023.
The rate of the Vacant Homes Tax is being increased with effect from 1 November 2023 to 5 times the property’s existing LPT liability.

VAT

The registration thresholds are being slightly increased to €40,000 for the supply of services and €80,000 for the supply of goods from 1 January 2024.
From 1 January 2024 the rate of VAT on audiobooks and eBooks will be reduced to 0%.
The 9% VAT rate for Gas and Electricity supplies is being extended to 31 October 2024.
The supply and installation of solar panels in schools is being reduced to 0% from 1 January 2024.
The Farming VAT flat rate is being reduced to 4.8% from 1 January 2024.

Other Measures

The fund for the Charites VAT Compensation Scheme is being increased from €5m to €10m.
The aggregate value of items donated in a year under the Heritage Donation scheme to be increased from €6m to €8m.
The tapering relief applied to benefit in kind on battery electric vehicles is being enhanced so that the current Original Market Value deduction of €35,000 remains until 2025 followed by €20,000 in 2026 and €10,000 in 2027. The universal relief of €10,000 to the OMV is being extended for a further year to end 2024.

Read our tax team’s analysis of Budget 2024.